OPERATIONS, SPEND SMARTER FEBRUARY 2017 IMPORTANT NOTICE The - PowerPoint PPT Presentation

SIMPLIFY OPERATIONS, SPEND SMARTER FEBRUARY 2017

IMPORTANT NOTICE The following information contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or future financial performance, including, but not limited to, expectations regarding market growth and development as well growth and profitability of Basware. In some cases, such forward-looking statements can be identified by terminology such as “expect”, “plan”, “anticipate”, “intend”, “believe”, “estimate”, “predict”, “potential”, or “continue”, or the negative of those terms or other comparable terminology. By their nature, forward -looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the forward-looking statements, possibly to a material degree. All forward-looking statements included herein are based on information presently available to Basware and, accordingly, Basware assumes no obligation to update any forward-looking statements, unless obligated to do so pursuant to an applicable law or regulation. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Basware or otherwise to engage in any investment activity.

WHY BASWARE Huge THE Cloud Market Market Focused Opportunity Leader Strategy 3

SIMPLIFY OPERATIONS, SPEND SMARTER The Problem The Solution Uncontrolled spending Connect Inefficient manual processes Optimize Poor cash flow visibility Manage 4

HELPING OUR CUSTOMERS REALIZE TOMORROW’S FINANCIAL GOALS TODAY straight >1 million 500,000 €450,000 Reduced invoicing through 60% costs by invoice organisations 75% processing E-invoices delivered annually direct cost savings connected to our Network Process over Receive 90% 40% 97% 66% 2500+ large of invoices without Reduction in AP of invoices as any manual headcount cost savings customers electronic intervention invoices use our P2P software 60% Hitting on-time payment 75% Delayed/denied target rate of over $457,000 on 85% e-invoicing Reduction of paper $7.6 million in spend £176,000 annual savings 5

MEGA TRENDS DRIVING DEMAND FOR BASWARE’S SERVICES Open Networks Digitalisation Big Data e-commerce Robotics and AI Public Sector Initiatives Disruption of Traditional Automation Financing Models 6

SIGNIFICANT MARKET OPPORTUNITY Underpenetrated market EUR 15 billion Market potential (1) Largest e-invoicing network No. 1 in Accounts Payable is global leader Top 3 in Procurement EUR 3.5 billion EUR Current market (1) Competition is 149 million fragmented Basware 2016 revenues (1) Annual spend on source-to-pay and e-invoicing network services for key, corporate, SMB medium and public sector customers in Europe and North America. Source: Basware, Forrester, Gartner, Billentis, EESPA 7

RECOGNIZED MARKET LEADER Procure to Pay Navigator 2016 Leader with highest score for Adaptability Basware scores highest in five categories “an impressive company that offers a leading solution among global P2P providers” 8

OPEN NETWORK IS DIFFERENTIATOR Largest Multi-lingual, Open Network Global e-invoicing network Philosophy Multi-format Trusted Partner >100 million 220+ >70 Used in more than 100 interoperability eInvoice formats Transactions partners supported countries annually 1M+ VAT compliance Connected to main >EUR500 billion in more than 50 government Active buyers annual spend on Basware’s network and suppliers countries hubs Huge Data Asset 9

GEOGRAPHICAL AND INDUSTRY REACH IS DIFFERENTIATOR Across the globe Supporting customers in all industries Manufacturing Food / Beverage Energy / Utility Telco / Media Healthcare / Pharma Automotive Services Industrials Transport / Lodging Retail Finance / Professional Public Sector Geographies where Basware supports customers 10

INNOVATION IS DIFFERENTIATOR Basware is a Visionary We invented networked Invents P2P Creates its Recognized by Expands value P2P and have continued to software e-invoicing industry analysts as a added services to utilize Basware’s innovate since then, network to enable leader in providing true AP automation analytics for huge network data leading the market and customers asset maintaining our product superiority. 11

END-TO-END SOLUTION IS DIFFERENTIATOR NETWORK / FINANCING E-INVOICING AP AUTOMATION ANALYTICS WePROCUREMENT SERVICES • Stronger • Increased • Analytics & KPIs • Consumer • Eliminate payment relationships productivity • Complete spend experience friction • Foundation for • Streamlined • Collaboration with • Improved DSO, DPO, visibility sustainable growth processes AP and suppliers net operating income • Higher compliance and return on capital • 100% e-Invoicing • Automate all invoices • New savings • Risk mitigation • More cash for growth from day one from all systems opportunities • Direct and indirect spend CONNECT MANAGE OPTIMIZE 12

HOW BASWARE WILL SEIZE THE OPPORTUNITY Sales & Integrated & Operational High Customer Innovation Marketing high-quality excellence performance experience effectiveness culture offering Expand Value Extend P2P Grow the Added Services Leadership Network Cloud Revenue Growth 13

2020 STRATEGY GOALS 2020 Strategic Goals Strategic Priority Cloud revenue growth Cloud Revenue Growth >20% CAGR on an organic basis Annual net sales >EUR 220 million Recurring revenue ~ 80% of net sales Continue to improve underlying profitability * Cloud revenue includes transactions services, SaaS and other subscription and financing services revenue excluding alliance fees ** Recurring revenue consists of net sales excluding license sales, consulting revenue related to deliveries, and alliance fees 14

STRONG CLOUD GROWTH TOTAL REVENUES IMPACTED BY TRANSITION Total Cloud Non-Cloud 100 100 160 90 90 140 80 80 Net Sales, EUR millions 120 70 70 100 60 60 + = 50 50 80 40 40 60 30 30 40 20 20 20 10 10 0 0 0 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 SaaS Transaction Services Other Cloud Maintenance License Consulting Other Non-Cloud 15

SHIFT IN REVENUE MIX SUPPORTS FUTURE GROWTH ACCELERATION 2016 Q4 2013 Cloud Cloud Revenues Non-Cloud Approaching 50% 2010 2016 Q4 US, UK, Germany Other International International Finland Business Growing

HISTORICALLY PROFITABLE & CASH GENERATIVE 20 Adjusted EBITDA (EURm) Sales and marketing 10 expansion 0 2010 2011 2012 2013 2014 2015 2016 + Net Operating 20 Cashflow (EURm) Ongoing investments in 10 product development 0 2010 2011 2012 2013 2014 2015 2016 -10 = 20% of Net Sales R&D as % Impact on 2016 10% profitability 0% 2010 2011 2012 2013 2014 2015 2016 R&D (expensed) R&D (capitalized) 17

ACQUISITIONS SUPPORT BASWARE STRATEGY WITH M&A OUR PRIORITIES ARE... OUR KEY CRITERIA INCLUDES... • • Extend Basware Network High share of cloud revenues • • Consolidate P2P competition Visible revenue synergy opportunity • Strengthen our offering • Profitable or clear path to • Focus on key markets profitability • Substantial benefits to customers DISCIPLINED APPROACH TO ACQUISITIONS Year Company Country Key rationale 2016 Verian US Strengthen market position in the US. Extend Network to Verian customers. Strengthen eProcurement 2015 Procserve UK Access to UK public sector customers to leverage the eInvoicing opportunity 2013 Certipost Benelux Gain a significant position in the Benelux e-Invoicing market 1 st BP 2012 Germany Become a leading e-Invoice operator in Germany 18

WHY BASWARE Huge THE Cloud Market Market Focused Opportunity Leader Strategy 19

APPENDIX SUPPORTING MATERIALS

THE SAAS TRANSITION: LOWER UPFRONT BUT HIGHER RECURRING REVENUES On-Premise Deal: Cumulative Revenues from Year 1 Upfront License Payment + Annual Maintenance Payments Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 License and Maintenance License & Maintenance SaaS SaaS Deal: Cumulative Revenues from Year 2 Monthly Payments Year 1 Year 2 Year 3 Year 4 Year 5 Year 2 Year 3 Year 4 Year 5 SaaS Maintenance SaaS 21

THE BASWARE EXPERIENCE EMPLOYEE REQUESTER • Special order • Online shopping “I need something.” requests experience • Automated • Items on contract calculations • All orders captured “I got my stuff easily and quickly, and I didn’t need to know procurement to do it. And I feel good about helping the company, too.” • I came in 12% under budget! • Woohoo – I am in the leader • I know where my order is position in savings! • I received it! • I know who to ping • I can tell the system 22

THE BASWARE EXPERIENCE THE APPROVER • Accessible from my • Detailed Emails smartphone • • Relevant Intelligence On the Go Approvals • Actionable Links “I know whether I should approve this – the • Budget Summary relevant budget, policy, and trends are • Transaction Impact right there for me.” • Committed Funds • Expensed Amounts • Easy access to actionable items 23